Will Reliance Jio overtake telecom leaders?

Reliance industries making efforts to get telecom industries into its grip. Reliance recently, launched Jio 4G services with cheapest tariff plans for internet and calls. Reliance has now launched the JioFi portable Wi-Fi hotspot and is priced at Rs 1999 along with free Jio services till December 31 this year. Will other telecom players remain mute spectators to the Jio's aggressive marketing? No, they will come up with the plan to counter Jio at initial stages.

The Wi-Fi hotspot called the JioFi is able to support up to 10 Wi-Fi-enabled devices and also through the USB. It contains an OLED display which provides data regarding network strength, Wi-Fi status and a lot of other things. Multiple users will be allowed to access the internet via Jio 4G internet. HD voice calls to video calls to messaging via Jio4GVoice app are the added new features. The Wi-Fi hotspot will be fueled by a 2,300mAh battery which the company has claimed will deliver almost 6 hours of life in the device.

Reliance Jio had made fresh competition in the field of mobile data network. Data is prohibitively expensive for a vast majority of rural India, and even amongst the urban elite who can afford to purchase 4G data packs, connectivity issues prevent one from taking full advantage of the service. Reliance made it easy by launching Jio. The launch of Jio signals an important shift from scrounging for data and data-scarcity to potentially an era of data abundance. The most obvious indicator of this are Reliance’s free voice calls, cheap data packages (4GB of 4G data for Rs. 499), the elimination of national roaming and its corresponding effect on competition (which has supposedly resulted in an industry-wide reduction of data rates). However, Airtel and Vodafone’s per GB rate could equal Jio’s current rates, but their rates come into effect only after users pay a monthly/upfront fee of Rs 1200+.

With all these features, reliance can aggresively capture telecom market. Reliance Jio's entry with disruptive offers have pushed smaller mobile service providers such Aircel, Telenor India, Tata Teleservices etc to the fringes.

With reliance jio effect, weaker operators will not have interest to invest in data networks. Even though these weak operators accounts for 25% of industry revenue and a likely 35%-40% volume share, given their low pricing. Weaker palyers with constrained financials will not be able to replicate Jio's offers.

Even though, Reliance has forcefully pushed the telecom industry towards will digitally empower India. But it expects the telecom arm of Reliance Industries to corner 10% revenue share of the mobile market in five years by supressing other telecom industry players.